Debt Recovery, Collection, Debt Collector

By: Gatwick Diamond Investigations, Crawley  10/11/2009
Keywords: debt, collections, Arrears

Why Debt Recovery not Debt Collection? We've always favoured "Recovery" as it has a more positive and proactive feel to it, and this is the service level you can expect from motivated and experienced specialists like us; if the money was owed to us we would want it Recovered not Collected so that's how we work!

"Collection" on the other hand seems very passive and weak, and just brings to mind high volume organisations who simply pump out endless threat letters and automated telephone calls, then collect from the people who were probably going to pay up anyway. Debt Recovery is about separating the "Can't pays" from the "Won't pays", then applying the most appropriate pressure to each individual debtor.

Credit control - get it under control before it even becomes a debt by letting us handle your credit control from the point you issue the invoice. We appreciate that each of your customers will need to be handled differently and that there is a clear distinction between the credit control and debt recovery phases.

Demand / threat letters - these are appropriately worded to ensure maximum impact and achieve early, cost-effective payment wherever possible.

Prompt & effective telephone dunning - ensures that the impact of the demand letters is not lost and helps to instil and maintain a sense of urgency and priority for your debt in the debtor's mind.

Handling telephone contact with the debtor effectively can make it an important fact-finding tool and can help differentiate early in the process between the "can't pays" and the "won't pays", so we can help you assess the realistic prospects of economical recovery. There is no point throwing good money after bad, unless there is a strong point of principle you wish to pursue regardless of whether you recover the debt.

Doorstep collections and arrears interviews are a further opportunity to fact-find in person from the debtor or from local enquiries and, whenever possible, to collect payments too of course.

Legal Action & Enforcement Options - if the debtor is uncooperative and you believe they can pay but won't unless they are pressurised by Court proceedings, you'll have no choice but to head down this route and we can help you decide on the most appropriate pressure which the legal system and the debtor's circumstances will allow you to bring to bear. In many cases a Judgment alone will not extract payment and we encourage our clients to plan ahead in terms of how they intend to enforce their Judgment and which method is likely to extract prompt payment.

To begin a claim in the County Court a Claim Form has to be prepared and issued, and there are then various scenarios depending on how the debtor is to be served, and if and how they choose to respond to your claim. When the Court grants you a Judgment payable immediately you can move to the enforcement stage. Disputes and defences can generally be resolved through relatively basic litigation, but in extreme cases we may recommend that you consult a solicitor who specialises in this area. We can put you in touch with solicitors with these skills and will negotiate favourable rates for you wherever possible.

A Charging Order can be sought to secure the Judgment debt over any land or property owned by the debtor. You then have the option to wait for the property to be sold or re-mortgaged whereupon you will be paid from any available equity after payment is made to the prior mortgagees and chargees, or to apply to the Court for an Order for Possession & Sale of the property in order to realise that equity more quickly.

An Attachment of Earnings can be sought against PAYE income and results either in payments being made by the debtor direct under a Suspended Order (at which stage the employer is unaware of the Court action) or being deducted at source via the employer and the Court.

A Warrant of Execution allows you to instruct the Bailiff, Sheriff, or High Court Enforcement Officer to seize goods from the debtor to the value of the debt plus costs or to collect payment should the debtor wish to avoid seizure. Emerging Debt Recovery Ltd are my preferred provider for this service and for commercial rent collection etc.

It is worth noting that in some cases you won't need a Judgment to pursue Bankruptcy against a debtor; it is possible to serve a Statutory Demand and follow that with a Bankruptcy Petition without having taken any other proceedings. We are happy to advise you whether this is appropriate on any of your debts.

Bankruptcy is the ultimate sanction if your debtor is insolvent or you have reason to believe they have committed insolvency offences which an Official Receiver or Trustee might be able to examine with a view to overturning transactions such as preferential payments to creditors or transactions at an undervalue. This is an extremely complex area and further information is available on request.

A Garnishee is a rather speculative method of enforcement and is rarely used, but in certain cases can result in funds being seized whilst in bank accounts and other financial assets or investments being seized from the relevant institution.

An Order for Production of Statement of Means is intended to bring the debtor, under threat of arrest, before the Court to explain their non-payment and examine their financial circumstances and domestic budget to produce an Order for monthly instalments at a mutually acceptable level. Although this does persuade some debtors to maintain regular payments and gathers valuable information, the disadvantage is that if the debtor defaults you will incur further costs having to pursue fresh enforcement proceedings.

Corporate Debts - where a limited company, LLP or partnership is insolvent and the directors or partners are unwilling or unable to take the appropriate steps to appoint a Liquidator or Receiver, creditors can Petition for the Winding Up of the business.

Keywords: Arrears, collections, debt

Contact Gatwick Diamond Investigations, Crawley


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